Just 10 days after Nevada legalized recreational marijuana, the state has hit a major roadblock.

Nevada's governor has declared a "state of weed emergency" for recreational marijuana regulations after the state's tax authority declared that many stores are running out of legal weed.

The emergency declaration comes after the state's newly legalized recreational marijuana program amassed an astounding $3 million in sales revenue and $500,000 in tax revenue after just four days, which was way ahead of estimates, according to the Nevada Dispensary Association.

"Based on reports of adult-use marijuana sales already far exceeding the industry's expectations at the state's 47 licensed retail marijuana stores, and the reality that many stores are running out of inventory, the department must address the lack of distributors immediately," said a statement from the Nevada Tax Commission. "Some establishments report the need for delivery within the next several days."

So how did this happen?

The problem lies with Nevada's strange and flawed distributor policy…

Nevada Has a Distributor Problem

You see, Nevada has approved 47 dispensaries to sell recreational marijuana, but they cannot restock their inventory — only Nevada's alcohol wholesalers can.

But here's the catch: No wholesalers have been cleared by the state yet.

So in order to keep the profits rolling, the state Department of Taxation will now consider emergency regulations to provide a structure for distribution to marijuana businesses, according to a July 11 statement.

Under the emergency regulation, which will be voted on this Thursday, more applicants would be allowed to apply for distribution and transportation licenses that would allow them to carry recreational marijuana to dispensaries. The regulation is expected to pass.

NEW: Plot your course to a seven-figure weed windfall with the top pot stocks from every ecosystem – growers, edibles, dispensaries, and more. Read more…

"Without the retail sale of marijuana, the state will not realize the revenue on which the state budget relies," reported the Department of Taxation.

Additionally, "If sales of marijuana stop, businesses will be forced to shutter or even lay off staff," said department spokesperson Stephanie Klapstein to Gazette-Journal.

"Unless the issue with distributor licensing is resolved quickly, the inability to deliver product to retail stores will result in many of these people losing their jobs and will bring this nascent market to a grinding halt. A halt in this market will lead to a hole in the state's school budget," Klapstein added.

The distribution setback doesn't apply to Nevada's preexisting medical marijuana businesses. Moreover, Nevada supports reciprocity, which means anyone with a medical marijuana card – regardless of state of issue – can purchase marijuana in the state.

However, although this small portion of Nevada consumers can still get legal pot – even while distribution is in limbo – it won't compensate for the lack of revenue from the weed shortage.

"I think it's something Nevada will figure out," said Cyrus Farudi, president of a holding company that owns multiple marijuana businesses, to MIC on July 11. "Everybody is aligned on wanting to get this done."

The Best Pot Stocks to Invest in as More States Legalize

Legal marijuana sales are already projected to reach $3.9 billion in 2017, and they could be even higher as more states like Nevada legalize.

Investors who are forward-looking could make long-term gains from this trend. But there are thousands of legal marijuana companies out there, and picking the right ones for your portfolio can be daunting.

That's why we've put together an exhaustive list of the best, most lucrative, and fastest-growing legal pot stocks in America. They're all in our 89-page "bible of weed investing" The Roadmap to Marijuana Millions.

One of the marijuana stocks in our Roadmap – Canadian Bioceutical Corp. (OTCMKTS: CBICF) — has already climbed 150% over the past five months, and it still has plenty of room to run.

it's a bit misleading. I also believe some of them will skyrocket next July but at this point I have 10 of them for the last 6 months and 7 are down (total -18%). Of course, Michael has been providing numbers since last September when he recommended first but who cares about last September, right? Past is past. Well, I'm just being patient and holding all

Unfortunately I was hit with some very expensive medical bills for my wife because of the obuthead healthcare that I have. Having a $ 7,500.00 deductible is like having no insurance at all. But I am committed to get these cannabis stocks down some how. I have been following your news letters and other emails and learning alot but still somewhat hesitant because it's all new to me. I am hopeful I can get started very soon with your help.

By submitting your email address you will receive a free subscription to Money Morning and receive Money Morning Profit Alerts. You will also receive occasional special offers from Money Map Press and our affiliates. You can unsubscribe at anytime and we encourage you to read more about our privacy policy.

You can view our VQScore top-rated stocks now by entering your email below:

By submitting your email address you will receive a free subscription to VQScore and occasional special offers from Money Map Press and our affiliates. You can unsubscribe at anytime and we encourage you to read more about our privacy policy.

Today's Markets

DJIA225.83(0.88%)25,971.50

NASDAQ106.71(1.38%)7,835.68

S&P31.09(1.10%)2,855.32

ABOUT MONEY MORNING

Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

By submitting your email address you will receive a free subscription to Money Morning and receive Money Morning Profit Alerts. You will also receive occasional special offers from Money Map Press and our affiliates. You can unsubscribe at anytime and we encourage you to read more about our privacy policy.